Storebrand Asa · OSL:STB
Storebrand Asa — Q1 2014 Earnings Presentation
23 slides from Storebrand Asa's earnings presentation, May 7, 2014
Slide 1: Storebrand Q1 2014
Storebrand Q1 2014 7 May 2014 Odd Arild Grefstad – CEO Sigbjørn Birkeland – Finance Director 1
Slide 2: Highlights Q1 2014
Highlights Q1 2014 Result Group result of NOK 728 mill in Q1 2014 Strong risk results Nominal cost reductions of 5.4%1 from Q1 2013 Operations Clarity on longevity reserve strengthening 16% growth in occupational DC premiums 137 companies in Q1 on higher DC saving rates than previous max
Slide 3: Storebrand Group - strong results
Storebrand Group Group - strong results Result Q1 Full year NOK million 2014 2013 2013 Fee and administration income 1 057 1 021 4 253 Underwriting result 353 234 1 111 Operational cost (non-recurring items excluded) -785 -816 -2 938 Financial result 121 20 97 Result before profit sharing and loan l
Slide 4: Our strategic response to changing market conditions
Our strategic response to changing market conditions We work hard to reach our vision: Recommended by our customers Managing the balance sheet Developing the business Concepts Capital Risk Employees optimisation reduction Corporate relation Managing business Save for without raising < retirement new
Slide 5: Managing the balance sheet
Managing the balance sheet Capital optimization Risk reduction Transfer out of guaranteed products 21 221 7 192 Portfolio segmentations paid-up policies MNOK 9 955 4 074 Managing business 2012 2013 Q1 2014 Sum without raising new equity capital Product optimisation Cost reduction Accumulated run-r
Slide 6: Longevity - 1.9 bn reserved for longevity in Q1
Longevity - 1.9 bn reserved for longevity in Q1 Final reserving rules Reserving needs and reserves Step up plans can have a maximum Reserving need Excess value Bond at Amortised Cost duration of seven years (up until MVAR 2020). Reserved by 31.03.2014 * 15.5 The reserves may be funded with exces
Slide 7: Longevity - result impact dependent of financial returns
Longevity - result impact dependent of financial returns Asset allocation Expected result effects Other Equities 6% 9% Bonds Real estate Annual Expected Annual 11% booked restult result 21% return effect effect 4% ~3 500 ~500 4.4% ~2 300 ~330 4.5 % ~2 100 ~300 5% ~1 100 ~160 11% 43% NOK 90 million
Slide 8: Paid-up policies with investment choice
Paid-up policies with investement choice Comments: Pro and cons of converting Hearing period concluded: Early conversion may trigger higher – Longevity reserving contribution from shareholders for – Pay out profiles longevity reserving – Advising Positive elements from conversion to Based on
Slide 9: Key figures Group
Key figures Group Result development Earnings per share1 Net profit sharing and loan losses MNOK 1.78 1.82 Sale discontinued business/change in pension plan Result before profit sharing and loan losses 1.43 1.38 Longevity provision 1,054 810 180 728 1.03 554 519 56 86 277 40 71 95 55 668 597 707 459
Slide 10: Storebrand Group - strong results
Storebrand Group Group - strong results Result Q1 Full year NOK million 2014 2013 2013 Fee and administration income 1 057 1 021 4 253 Underwriting result 353 234 1 111 Operational cost (non-recurring items excluded) -785 -816 -2 938 Financial result 121 20 97 Result before profit sharing and loan l
Slide 11: Savings (non-guaranteed) - continued result improvement
Savings (non-guaranteed) Savings - continued result improvement Result Q1 Full year NOK million 2014 2013 2013 Fee and administration income 509 448 1 888 Risk result life & pensions -2 0 7 Operational cost * -321 -335 -1 279 Financial result - - - Result before profit sharing and loan losses 186 11
Slide 12: Savings (non-guaranteed) - continued growth
Savings (non-guaranteed) Savings - continued growth Reserves and premiums Unit Linked Comments 2.768 2.463 2.318 2.296 2.273 16% growth in occupational pension 87.105 85.452 UL premiums MNOK 79.341 +24% 70.458 73.542 Growth in reserves backed by good equity markets 1Q 2013 2Q 2013 Q3 2013 Q4 201
Slide 13: Insurance - Change in segment reporting
Insurance Insurance - Change in segment reporting Result Q1 Full year NOK million 2014 2013 2013 Insurance premiums f.o.a. 770 758 3 034 Claims f.o.a. -492 -566 -1 940 Operational cost -125 -128 -463 Financial result 74 32 143 Result before profit sharing and loan losses 226 95 774 Net profit sharin
Slide 14: Insurance - SPP risk products included in Insurance
Insurance Insurance - SPP risk products included in Insurance Combined ratio Comments Claims ratio Cost ratio Combined ratio 92% 80% 81% 80% From Q1 2014, SPP risk products are 65% reported under Insurance 75% Storebrand Health Insurance is from 71% 64% 61% 49% Q1 2014 no longer consolidated 17%
Slide 15: Guaranteed pension - longevity charge
Guaranteed pension Guaranteed - longevity charge of NOK 90 mill Result Q1 Full year NOK million 2014 2013 2013 Fee and administration income 474 491 2 013 Risk result life & pensions 78 40 7 Operational cost -281 -271 -1 016 Financial result - - - Result before profit sharing and loan losses 272 260
Slide 16: Guaranteed pension - strong booked return
Guaranteed pension Guaranteed - strong booked return Reserves guaranteed products Comments Transfer out of guaranteed products of 7,2 bn in Q1 -1% 2.0% booked return for portfolios with MNOK 261.502 258.654 262.126 263.776 259.353 reserving need 1.8 bn unallocated result that will mainly be us
Slide 17: Other
Other Other Result Q1 Full year NOK million 2014 2013 2013 Fee and administration income 74 82 353 Risk result life & pensions -1 2 3 Operational cost -58 -82 -180 Financial result 47 -12 -46 Result before profit sharing and loan losses 62 -10 129 Net profit sharing and loan losses -48 -1 -11 Result
Slide 18: Summary
Summary Strong results 1.9 bn to be available for longevity reserve strengthening Cost program on plan: nominal cost reduced by 5% Conversion from guaranteed pension to non- guaranteed savings is reflected in balance and revenues 18
Slide 19: @d storebrand
@d storebrand @9 storebrand
Slide 20: Appendix
Appendix: 20 @9 storebrand
Slide 21: Market impacted by extensive product reform
Market impacted by extensive product reform – important regulatory changes in place New legal framework for Norwegian occupational pension Important changes 1. Increased maximum saving rates in 4 DC schemes, from 1 January 2014 DB Paid-up − Up to 7% for wages up to 7G * Defined benefit policies − Up
Slide 22: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Bonds at Equities Bonds Money market Real estate Other amortized cost 31.03.2013 7% 21% 16% 37% 14% 6% 30.06.2013 7% 20% 15% 40% 12% 5% 30.09.2013 8% 20% 15% 41% 11% 6% 31.12.2013 9% 19% 12% 42% 11% 6% 31.03.2014 9%
Slide 23: SPP asset allocation
SPP asset allocation 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Alternative investments Bonds Equities 31.03.2013 8% 81% 12% 30.06.2013 7% 81% 12% 30.09.2013 7% 83% 10% 31.12.2013 7% 82% 11% 31.03.2014 7% 82% 11% 1 The graph shows the asset allocation for all products with an interest rate guarantee in